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Old 7th August 2019, 13:24   #226
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

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Originally Posted by AWD View Post
These auto manufacturers were looting consumers through super expensive repairs & service, not to mention the initial cost of acquiring the vehicles. I hope a better & more frugal Industry rises up from the debris of loot, which provides cheaper costs of ownership, are more consumer friendly setups.
Showrooms & service agencies had become so rude & were taking consumers for granted. I already see them normalising from the interactions with consumers post slowdown. So this one is a great leveller.
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Originally Posted by truezealous View Post
Among the other reasons, the biggest single factor in an auto sales collapse is seems to be deepening liquidity crunch among India's Non-banking finance companies (NBFCs), or shadow banks.
In India, NBFCs have in recent years helped fund nearly 55-60% of commercial vehicles both new and used, 30% of passenger cars and nearly 65% of the two-wheelers in the country, according to rating agency ICRA.
IL&FS, or Infrastructure Leasing & Financial Services Ltd, was a behemoth in shadow banking and its defaults and unravelling, amid fraud allegations, have dried up funding for rivals and led to a surge in their borrowing costs.
While 70-75% of car sales were previously financed in-house by NBFC or bank agents sitting at a dealership, that has fallen to about 50%, say dealers, as buyers struggle to qualify under more stringent lending norms put in place by lenders that are under pressure to shore up their books.
Moreover, as many NBFCs typically lent to less creditworthy clients, banks are reticent to rush in to fill the void, as they themselves struggle to cope with an existing pile of about $150 billion in bad loans.

source.

First , there are at least 3 threads (incl this one ) which chronicle the same topic. I request mods to merge them to a single thread if thematically possible.

I picked two posts to which i agree. NFBCs and auto companies were (and still are) hand in glove. As long as loan is available , auto companies don't feel the need to lower their prices and as long as auto companies are able to sell , NBFCs can carry on with their activities. It was a win-win situation for both. Even if your CRISIL score is low, the dealer and financier will find some way to disburse the loan and push the vehicle to you. GOI , in my opinion , was actually correct to tighten the screws. 2 wheeler majors like TVS and bajaj have now started to disburse zero interest loans.

If i remember correctly , US was going through a similar phase in 08-09 and the then administration introduced some " Cash for clunkers " scheme which pulled out old smokies and incentivized cars like toyota prius ( hybrids ). Do correct me if i am wrong.
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Old 9th August 2019, 09:22   #227
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

While India's auto sector is facing a downturn, auto parts maker braces for plant shutdowns amid industry-wide crisis.

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Jamna Auto Industries Ltd, a maker of springs used in vehicle suspensions joins a growing list of auto components manufacturers, including Bosch Ltd and Wabco India Ltd, that have trimmed production amid a demand slump.
The company might shut all its nine manufacturing facilities across the country.


Link

Last edited by volkman10 : 9th August 2019 at 09:23.
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Old 16th August 2019, 20:00   #228
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Over 3,000 temporary jobs not being renewed at Maruti Suzuki. But could be taken back once it is the sales becomes normal.

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Old 17th August 2019, 09:51   #229
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Ashok Leyland floats VRS, separation scheme for employees.

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Ashok Leyland had floated two schemes on Wednesday. The packages are capped at Rs 30 lakh and Rs 60 lakh, possibly based on experience with the company; the Employee Separation Scheme being an alternative for those who do not opt for the VRS. Employees have been informed that they need to intimate the company before end of August to avail themselves of the scheme.

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Old 18th August 2019, 22:52   #230
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

While many valid aspects have been covered as reason for the slowdown, the twitter thread makes couple of very valid points, regarding CVs :

https://mobile.twitter.com/oarhtanir...97521285029889

Quote:
1. Post GST truck & CV movements have improved by anywhere between 30-40% due to removal of hurdles at border checks.. this has improved existing vehicle utilization by 30%
Quote:
2. Govt has increased the allowable tonnage load by 25%
GST making goods movement faster, and more efficient thus optimizing the number of trucks was earlier covered here.

Quote:
It took Ram just 42.35 hours to cover 1,288 km. In the days before GST and before Indiaís highways were the four-lane beauties they are today, it would have taken about four days to cover the distance. Though some issues remain, the flow of goods along Indian highways has definitely become smoother and faster.
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Old 21st August 2019, 14:17   #231
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Passenger vehicle inventories down to 25 days

According to Federation of Automobile Dealers Associations (FADA) passenger vehicle inventories are down to 25-30 days.

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-vehicle-inventory.jpg

The decrease in inventory levels can be attributed to a reduction in wholesale billing by manufacturers and a cut down in production as sales have slumped in the past few months.

Reports suggest that inventory levels of commercial vehicles and 2-wheelers remain at 55-60 days and 60-65 days respectively.

Retail sales continued their downward trend in the month of July 2019. All segments except 3-wheelers registered negative growth compared to the same period last year. 2-wheeler and passenger vehicle sales dropped by 5% and 11% respectively. The CV segment registered a de-growth of 14%, while 3-wheeler sales grew by 3%.

The full Press Release:

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Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-08-fada.jpg

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Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-11-fada.jpg

Source: Economic Times

Link to Team-BHP News

Last edited by Aditya : 29th August 2019 at 11:05.
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Old 25th August 2019, 12:18   #232
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

We have threadbared this issue. TV and other media is at it mulling every aspect of this crises, even FM has spoken about it and some actions have been taken. But do you feel that the sales will return to the same gallop as before.
I feel the change is behavioral in nature more than being cyclical or structural. In late 2000's I remember reading somewhere that if the rate of growth of vehicles and that of construction of infrastructure maintains the pace what is at this moment in time then by 2014 in urban India there will be no space to ply or park the vehicles. I think we have hit that point now and this realisation has come to general populace as well.
But then what about needs of growing economy and aspirations of countrymen. So I feel a balance is likely to emerge and this point IMHO is going to be lower than what has been the highpoint of past. A new normal may emerge soon.
Will vehicle scrapping policy propel the growth, maybe not, we have a market for every age and price point of the vehicle, so how can you discard if you have a use for that vehicle.
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Old 25th August 2019, 13:08   #233
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

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Originally Posted by BoneCollector View Post

Now extrapolate this to thousands of people if not lacs, especially salaried middle class tax-payers who would be having a fairly new car or an old one doing good job and there is no need for replacing immediately. That means that lesser people would be going in for a new car amongst the earlier owners. And new car owners would be mainly first time buyers. In this case, isn't the market kind of saturated and coming down the plateau phase? Or am I missing something?
Quoting my earlier post, there is also a trend amongst the new generation to not buy a car. https://www.team-bhp.com/forum/inter...rs-houses.html (The Cheapest Generation - Why Millennials arenít buying cars or houses)

2 of my cousins, one at Hyderabad and one at Pune, are not willing to buy a car. Their point is that Ola and Uber are available everywhere they go so why spend on a personal vehicle.

There is a report, a presentation by Dr Pawan Goenka, MD, M&M - highlighting the reasons and steps to be taken to tackle slowdown in auto industry.

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-screenshot_20190825132739__01.jpg

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-screenshot_20190825132746__01.jpg

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-screenshot_20190825132753__01.jpg

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-screenshot_20190825132759__01.jpg

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Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-screenshot_20190825132813__01.jpg

Last edited by BoneCollector : 25th August 2019 at 13:31.
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Old 25th August 2019, 14:24   #234
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Is this presentation available in the public domain?

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Originally Posted by BoneCollector View Post
Quoting my earlier post, there is also a trend amongst the new generation to not buy a car. https://www.team-bhp.com/forum/inter...rs-houses.html (The Cheapest Generation - Why Millennials arenít buying cars or houses)

2 of my cousins, one at Hyderabad and one at Pune, are not willing to buy a car. Their point is that Ola and Uber are available everywhere they go so why spend on a personal vehicle.

There is a report, a presentation by Dr Pawan Goenka, MD, M&M - highlighting the reasons and steps to be taken to tackle slowdown in auto industry.
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Old 25th August 2019, 15:15   #235
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

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Is this presentation available in the public domain?
It had come as a forward a couple of days back in a group. I don't know if this is full or half.
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Old 25th August 2019, 20:37   #236
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

My Hyundai Verna (SX 1.6 AT) is nearing its 40,000 kms service so i called up Imran (my service advisor at Shreenath Hyundai Thane) to request him to book a service appointment.

Felt very sad when he mentioned that the workshop has shut down and he was out of his job (request you to please update this for the benefit of all Hyundai owning Team-BHP members staying in Thane & nearby). I have been hearing and reading about the slowdown but never thought it is so close to us.

Also i feel Hyundai should have atleast taken the effort to inform the existing customers and re-direct them to the nearest available alternate workshop (Modi Hyundai in my case). What does it take to send out a set of emails anyways.

For the benefit of other BHPians in the region, the extra load on Modi Hyundai's workshop means that you will have to wait for at least 45 mins in the queue before you can be attended to.

(Dear Mods please post this message in any other relevant thread if you think this does not belong here).
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Old 25th August 2019, 20:51   #237
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

I addition to all the factors listed above, in Punjab region, a major factor at play could be the emigration of the youngsters to foreign countries, the people are taking loans, selling agricultural land, properties and in whatever way possible, to send their kids abroad. The aftermath of this race for the foreign lands is that most of the private colleges, including some Engineering and Dental colleges, are also on the verge of closure, as there is no one to join the courses. The parents, after spending huge amounts, are either not in position to buy a new vehicle or there is no motivation or desire to get it, as mostly it is the younger generation which plays a role, in such decisions. This has resulted in downfall of not only automobile sector, but in all other fields. This is the state of affairs in most of the small towns and villages of Punjab.
A related news article from The tribune March 2019
https://www.tribuneindia.com/news/su...en/737152.html
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Old 25th August 2019, 23:51   #238
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

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I addition to all the factors listed above, in Punjab region, a major factor at play could be the emigration of the youngsters to foreign countries, the people are taking loans, selling agricultural land, properties and in whatever way possible, to send their kids abroad
Though migration has been happening but its been a trend since quite long now. On the contrary I've always felt Punjab's economy has been isolated from Country/global events. This is because its an agrarian economy basically & the state of Punjabs farmers has been a shade better than rest of the country's. Again its because Punjab didn't have to face any drought or such conditions. Migrations does play a role but its not a major factor in Punjab as NRI's in return do invest back home & these investments are in the form of big assets. Also India's population explosion is such that migration really doesn't take out much out of anything, for every exit, there are more than a 100 in the waiting to fill the gaps. Or you could put it as "survival of the fittest"!
The recent floods in Punjab could have a far greater affect in times to come, the devastation is huge & it will take time for people to stand back on feet again.
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Old 25th August 2019, 23:56   #239
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Ashok Leyland announced production shutdown on 24, 26, 27 and 31 Aug. at Ennore plant

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Old 26th August 2019, 13:46   #240
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Default Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

The situation is indeed brim. I got a first hand experience yesterday. The first service for my car was done at this service center belonging to a showroom in Pune. For my second service I found out that this service center had shut down and the showroom recommended me another one they had. I have this habit of taking my car at the service myself. I initiated a conversation with the representative there and he mentioned that it got shut down due to lack of volumes and presumably income. Now the staff there must have lost their jobs and in the current scenario in all probability most of them would now find new ones. The automotive sector is going through the darkest phase at the moment.
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